Indigenisation Act designed to “benefit politicians” – Mapfumi

The controversial Indigenisation and Economic Empowerment Act has been dismissed as a statutory instrument designed to suit the interests of politicians contrary to assurances that it seeks to empower ordinary citizens.

The scathing attack was made by the acting director of the Centre for Research Development (CRD), James Mupfumi.

“The indigenisation law was only used to position individuals in political spheres to allow them to penetrate the mining sector and loot minerals. It is not about community benefit,” charged Mupfumi.

The controversial act states that all foreign-owned companies should have a maximum 49 per cent stake, while black Zimbabweans hold the balance.

It has attracted wide criticism from the business community for scaring away much- needed investors for the country’s economic turnaround exercise.

Civil organisations, which initially advocated for the legal instrument, have since attacked the act as flawed and subject to manipulation by political bigwigs.

Zimbabwe National Resource Dialogue Forum (ZNRDF) executive director Freeman Bhoso acknowledged the role of civil society prior to the implementation of the act.

Bhoso, however, lamented that though the civil society advocated for the law, it had been hijacked and manipulated by politicians.

He highlighted that the law had several policy gaps, which he believed were deliberately included.

“Various clauses indicate that companies ‘may’ do something. It doesn’t compel then to oblige to the sections enshrined in the act,” he said.

Recently, diamond companies mining in Chiadzwa have been under the spotlight after they revealed that they never pledged to disburse funds to the Marange-Zimunya Community Share Ownership Trust.

The minister of youth, Francis Nhema, also revealed that there were no recorded documents or footage to substantiate that mines agreed to disburse $10m each into the trust.

Mupfumi argued that the miners were taking advantage of loopholes in the indigenisation act. He further said that the government didn’t have a controlling stake in the mining sector, contrary to its claims.

“If the government claims that is has a 51 per cent controlling stake in Chiadzwa, for example, then why is treasury getting $8m out of $28m in diamond sales?” he asked. “Most of the companies are headed by politicians, who in turn subcontract other foreign companies to do the actual mining. This shows how much of a farce the whole indigenisation saga is.”

CRD and ZNRDF went on to slam government’s decision to appoint new board members at the Zimbabwe Mining Development Corporation in the absence of a new mining law to ensure transparency and accountability in the sector.

The government admitted losing billions of dollars in potential revenue due to unregulated mining practices.

Against this backdrop, the two civil groups jointly demanded the minister of mines, Walter Chidhakwa, to “urgently come out with a comprehensive mining development framework”.

“Civil society is aware that the appointment of the new mining boards alone will not bring about the desired outcome if it is not underpinned by stringent accountability measures,” read a joint statement. “It is, therefore, imperative for the ministry to expeditiously take the lead in realigning mineral policies and close existing gaps that have foreclosed acceptable remittances of the mining proceeds to treasury.”